Liens and deeds of trust (mortgages) are placed on real estate as a method of “securing” the debt by giving creditors an avenue to collect if the debtors fail to pay. They can be voluntary, such as a promissory note with deed of trust, or they can be involuntary, such as a lien placed on property after the creditor wins a lawsuit. Liens can also be placed on personal property in some cases.
Foreclosure most commonly occurs when a property owner misses mortgage payments. These types of foreclosures in California do not require a court case, but the lender must follow very specific, detailed procedures. When the property owner is a homeowner, there are special protections and options under the California Homeowner’s Bill of Rights, the National Mortgage Settlement, the federal Making Home Affordable programs, and other laws. Foreclosure may also occur when creditors force the sale of property and collect what they are owed out of the proceeds.
